EURUSD Technical Analysis

USD

• The Fed left interest rates unchanged as
  expected with basically no change to the statement. The Dot Plot still showed
  three rate cuts for 2024 and the economic projections were upgraded with growth
  and inflation higher and the unemployment rate lower.
• Fed Chair Powell
  maintained a neutral stance as he said that it was premature to react to the
  recent inflation data given possible bumps on the way to their 2% target.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The US Jobless Claims beat
  expectations across the board.
• The latest US Manufacturing
  PMI
  beat expectations while the Services PMI missed slightly. Both the measures
  remain in expansion though.
• The US Consumer
  Confidence missed expectations although the labour
  market details improved.
• The market expects the first rate cut in June.

EUR

• The ECB left interest rates unchanged as
  expected at the last meeting revising inflation and growth expectations
  downwards and maintaining the usual data dependent language.
• The recent Eurozone CPI beat
  expectations.
• The labour market remains historically
  tight with the unemployment rate hovering at record lows.
• The latest Eurozone PMIs beat
  expectations on the Services side while the Manufacturing one missed dropping
  further in contraction.
• The market expects the ECB to cut rates in June.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD recently
fell back into the 1.08 handle following strong US data. The sellers are
looking at the 1.0723 level, but they will need to break the 1.08 level first
to trigger a selloff into those lows. The trend recently turned bearish as the
price started to print lower lows and lower highs, and the moving averages crossed
to the downside. This should give the sellers some conviction for a move into
new lows.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more closely the
key support around
the 1.08 handle with the price recently bouncing on it before eventually
falling back to it after a rejection of the 38.2% Fibonacci retracement level.
This is where we can expect the buyers to step in with a defined risk below the
support to position for a rally back into the 1.10 handle. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the 1.0723 level.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
recent price action into the support has been pretty choppy. This might be a
signal of weakening momentum. We will likely need a catalyst to break below the
support zone and next week we will have plenty of it. For now, we might start
ranging around these levels awaiting new data to push on either side. A break
above the minor black trendline should
see the buyers increase the bullish bets into new highs as the sellers start to
take some profits off the table.

Upcoming Events

Today we get the latest US Jobless Claims figures,
while tomorrow we conclude with the US PCE and Fed Chair Powell.

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This article was written by FL Contributors at www.forexlive.com.